Chapter 3 - Law Of Contract Flashcards
What is this an example of where there must be at least two persons to make a contract but only one of them is legally bound
Unilateral contract
What is it an example of what each party makes a promise to the other and both are legally bound
Bilateral contract
Why can avoid contracts have no binding effect on either party
Because avoid contract is no contract at all
Why is a voidable contract binding
If one of the parties will have the right if they wish to set it aside
What are the Five essential for the formation of a valid contract
Agreement Intention to create legal relations Consideration Must be in the form required by law Parties must have the capacity to contract
What is six ways made an offer to be made
In writing Orally By conduct To one person To a group of people To the public
What happens is there is a true offer
The offeror intends to be immediately bound if that offer is accepted as it stands
As an offer cannot remain in open indefinitely what ways can it be ended
A time limit or a reasonable time Death Acceptance Revocation Rejection/counter offer
What does it mean when it says acceptance must be unqualified
It must exactly match the terms of the offer
What are the five rolls of consideration
Must be real Mustn’t be adequate Mustn’t be in the past Must move from the promisee Mustnt be something that the promisee is already bound to do
What six contracts must be in writing
Bills of exchange
Checks and promisSory notes
The transfer of shares in a registered company
Some consumer credit hire purchase transactions
Marine insurance contracts
Sale or other disposition of land
Under English law a minor is below the age of what
18
What three type of contracts are made by minors
Contracts which are binding (necessaries such as food and clothing)
Contracts which are binding unless they are repudiated
Contracts which are not binding on the minor (borrowing money, buying things that aren’t necessaries)
Are contracts made by patients with a mental health condition generally valid?
Yes
A patient with a mental health condition can:
Ratify a contract which previously did not bring them after they are cured
Must also pay a reasonable price for necessaries supplies to them
Can a drunken person avoid a contract?
Yes, only if they didn’t understand what they were doing and the other party knew of this
What is certainty of terms
The contract must be certain and no contract is formed if a vital term is missing or if the meaning of an essential term is uncertain
What are express terms
Words spoken by the parties or written down by them
Oral contracts sometimes present problems of proof but not when the contract is in writing
What three ways can implied terms be
In fact
By custom
By usage
What are terms implied in fact
One which is not usually stated but is presumed to be intended by the parties
‘It goes without saying’
What are terms implied in custom
Custom of the market in which the parties to the contract operate
What are times implied in law
The rights and duties of the parties may be based in terms of the law automatically applies
What does the Unfair Contract Terms Act apply to
Business to business contracts
Under the unfair contract terms act what is negligence liability
Can’t exclude their liability for death or bodily injury arising from negligence
Under Unfair Contract terms act what is contractual liability
Can’t exclude or restrict their liability for breach of contract, except for a requirement of reasonableness
What is the sale of goods and hire purchase under the Unfair Contract Terms act
Implied terms cannot be excluded or restricted by a contract term
What is the consumers rights act 2015
Consumer contracts
Under consumer rights act is an unfair term contract or notice binding on the consumer
Not if it causes a Significant imbalance in the parties rights and obligations to detriment of the consumer
What is the importance of a warranty
It affects only some relatively minor aspects of the agreement
What happens if a warranty is broken under the general law of contract
Injured party has a right to claim damages or not to terminate the contract
What is the general law of contract what is the importance of a condition
It relates to an important aspect to the agreement i.e. it goes to route
Under the general law of contract what happens if the condition is broken
The big team has a right not only to claim damages but also to terminate the agreement
What is an intermediate or innominate terms
What terms can’t be classified as either conditions or warranties in advance as it is only when the effect of breach are considered but the true nature of the term is revealed
What are the five things defective contract may result from
Illegality Improper pressure Mistake Misrepresentation Nondisclosure
What five ways can a contract be discharged
Performance Breach Frustration Agreement Operation of law
What are the main remedies in the law of contract
Termination
An action for damages
An action for specific performance
An action for an injunction
As in the law of torts, The main common law remedy for breach of contract is what
An award for damages that is an award of financial compensation to the claimant
Like an action in thought and action for breach of contract if you do an action for what kind of damages
The liquidated damages were the amount to be awarded is fixed to by the court
What is the privity of contract doctrine
Which restrict the right and duties created by a contract to the persons who originally made it
What is the contract rights of third parties act
Provides that a third party can before leaving a contractual term if
A) the contract provides that they made do so
B) the contract purports to confer a benefit to the third party
What is assignment
Where the original party to the contract may be able to assign their rights under the contract to another who stands in their place
Under statutory assignment what three ways can you adding your debt
Absolute
In writing
Expressly made in writing to the debtor or the trustee
What three types of assignment are relevant to insurance contracts
Assignment of the subject matter
Assignment of the benefit of the contract
Assignment of the contract itself
If a policy is assigned where the property it covers is sold. Where must the assignment take place?
At the place of the sale
Are life policies freely assignable
Yes
Are marine insurance policies freely assignable
No
